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FHFA will settle as the court will come to a conclusion anyway, that is why it took so long as a settlement gives ethic (unreal) problems to main street as it might think it is a giveaway to wall street, somehow they figured to kick the can down the road would help, but as they now comprehend it only makes things worse, and somebody with power need to push the button real soon, and end this ethic problem, not settling will lead to (a real problem) a verdict the government overstepped its authority and unveil coercion, this is the biggest problem you can have as government, as in the next crisis down the road everybody will run for the hills with their money, which makes the next crisis the worst one ever, ethic problems are not to be underestimated as you conclude yourself “Do you really think they are worried about ethics? “ which implicates you already lost confidence is the system, so what will you do in the next crisis with your money? Indeed and that is what everybody will do, so the government is only interested in the ethics and not in the money, money is free obtainable, a Democracy runs on ethics and free honest choices, otherwise you end up in a Dictatorship
Correct 4617 forbids to take action on the third amendment it is however not a “loss” as HERA contradicts the constitution, so while the court cannot claim the 3th amendment needs to be overruled (Loss in Lamberth) it is also not possible there is a taking with no compensation as the constitution demands that, so HERA 4617(a)(7) is in conflict with the constitution, but the lawsuits itself remained intact, and the actions taken by FHFA were not declared legitimate, so for now it is a loss but anybody can start a new lawsuit in perpetually and have standing as it is a constitutional error
That is also why no lawsuit can be closed as plaintiff need to have relief on the questions asked, and as 4617 is already ruled on, the only question remaining is what will the relief for plaintiffs demands be
they cannot legalize HERA as it would conflict the constitution
they cannot legalize the “for cause” as it would undermine the president
they cannot legalize the SPSPA as it would make duress legal
4617(a)(7);
(7)AGENCY NOT SUBJECT TO ANY OTHER FEDERAL AGENCY When acting as conservator or receiver, the Agency shall not be subject to the direction or supervision of any other agency of the United States or any State in the exercise of the rights, powers, and privileges of the Agency.
https://www.law.cornell.edu/uscode/text/12/4617
Correct, the odds of a settlement never have been higher, plus how can you go to trial with a sealed case and thousands of interested people, and the ethic problems that will give
Agree, just matter of what the angle is your looking at it legal or investor, and officially they are of course not guilty, but will investors buy the stock now after the motion to dismiss, probably they will, while if the motion to dismiss was granted they would not, so it moves the needle from 0% to 50%
I don't recall a "loss" in any case ? (other then lack of authority) do you have one specific in mind ?
Thanks!
Then these align…
18-2506 Bhatti vs. FHFA……………Common & Preferred
On appeal in the 8th circuit, Oral Argument 10/15/2019
The court strives to issue the opinion within 90 days after oral
Argument or submission to a nonargument panel.(+- Jan 12, 2020)
19-7062 Joshua J. Angel v. Freddie Mac …………….Preferred
deferred appendix due 01/29/2020. final briefs due 02/12/2020
18-1124C Wazee Street Opportunities Fund IV LP v. United States……………Common
52-day enlargement of time, through and including February 10, 2020, within which to file the status report
13-465C FAIRHOLME FUNDS, INC. v. United States…………..Common & Preferred
motion for a 14-day enlargement of time, up to and including February 7, 2020
Fannie & Freddie Active Lawsuits Updated
19-422 Vide 19-563 Collins v. Mnuchin……………Common & Preferred
Honorable: Judge Nancy F Atlas in District Court
Claim: “for cause” separation of powers
Supreme court https://www.scotusblog.com/case-files/cases/collins-v-mnuchin/
This was case 17-20364, the 5th circuit remanded this back to Judge Nancy F Atlas in District Court, S.D. Texas, a Petition for a writ of certiorari is filed in the SCOTUS by plaintiff, and the government also filed a petition for a writ of certiorari in this case
(DISTRIBUTED for Conference of 1/10/2020 but case was not decided, and redistributed to an unknown date)
18-2506 Bhatti vs. FHFA……………Common & Preferred
Honorable: Patrick Joseph Schiltz
Claim: 3th amendment & “for cause” separation of powers
On appeal in the 8th circuit, Oral Argument 10/15/2019
http://media-oa.ca8.uscourts.gov/OAaudio/2019/10/182506.mp3
(The court strives to issue the opinion within 90 days after oral
Argument or submission to a nonargument panel. http://media.ca8.uscourts.gov/newrules/coa/iops06-19update.pdf)
13-1288 Miscellaneous Class Action …Common & Preferred
Honorable: Royce C. Lamberth
District Court for the District of Columbia
The Class:
13-cv-1094 (rlw) Mary Meiya Liao,
13-cv-1149 (rlw) Joseph Cacciapalle, et al.,
13-cv-1169 (rlw) American European Insurance Company
13-cv-1184 (rlw) John Cane,
13-cv-1208 (rlw) Francis j. Dennis,
13-cv-1421 (rlw) Marneu Holdings Company, et al.,
13-cv-1443 (rlw) Barry p. Borodkin, et al.
https://www.courtlistener.com/docket/4212341/in-re-fannie-maefreddie-mac-senior-preferred-stock-purchase-agreement/
Fact discovery Shall close on April 30, 2020, Trial is set for March 31, 2021 (with a pretrial 30-60 days before)
17-497 Rop v. Federal Housing Finance agency…….Common & Preferred
Honorable: Paul L. Maloney
District Court, W.D. Michigan
https://www.courtlistener.com/docket/13521280/rop-v-federal-housing-finance-agency/
No next Date available (waiting on Collins, as document 64 says “notice of supplemental authority concerning Collins v. Mnuchin” )
18-3478 Wazee Street Opportunities Fund IV LP v. United States……………Common
Honorable: Nitza I Quinones Alejandro
District Court, E.D. Pennsylvania
https://www.courtlistener.com/docket/7681282/wazee-street-opportunities-fund-iv-lp-v-the-federal-housing-finance-agency/
Aug 2, 2019 Stipulation and Order doc#36 (waiting on Collins as document 38 says Supplemental authority filed by Defendant ….. in the matter of Collins v. Mnuchin, No. 17-20364)
19-7062 Joshua J. Angel v. Freddie Mac …………….Preferred
Previously assigned to: Honorable: Royce C. Lamberth
District Court for the District of Columbia
On appeal in the United States Court of Appeals for the district of columbia circuit
https://www.courtlistener.com/docket/26534/joshua-angel-v-federal-home-loan-mortgage-co/
deferred appendix due 01/29/2020. final briefs due 02/12/2020
13-1439 Arrowood Indemnity Company v. Fannie Mae……Preferred
Honorable: Royce C. Lamberth
District Court for the District of Columbia
https://www.courtlistener.com/docket/6995674/arrowood-indemnity-company-v-federal-national-mortgage-association/
(Case Related to 13-698C Arrowood & 18-1142 Joshua J. Angel, Doc# 3 & 89)
Fact discovery Shall close on April 30, 2020, Trial is set for March 31, 2021 (with a pretrial 30-60 days before)
13-1053 Fairholme Fund, Inc. v. FHFA……Preferred
Honorable: Royce C. Lamberth
District Court for the District of Columbia
https://www.courtlistener.com/docket/4212077/fairholme-funds-inc-v-federal-housing-finance-agency/
Fact discovery Shall close on April 30, 2020, Trial is set for March 31, 2021 (with a pretrial 30-60 days before)
----------------------------------------------------
Cases in Sweeney’s court
----------------------------------------------------
18-1124C Wazee Street Opportunities Fund IV LP v. United States……………Common
Honorable: Nitza I Quinones Alejandro
https://www.courtlistener.com/docket/7681282/wazee-street-opportunities-fund-iv-lp-v-the-federal-housing-finance-agency/
52-day enlargement of time, through and including February 10, 2020, within which to file the status report (http://www.glenbradford.com/wp-content/uploads/2019/12/18-1124-0009.pdf
13-465C FAIRHOLME FUNDS, INC. v. United States…………..Common & Preferred
Court: United States Court of Federal Claims
https://www.courtlistener.com/docket/4198608/fairholme-funds-inc-v-united-states/
January 10, 2020,( enlargement of time of 14 days, to and including January 24, 2019) the parties shall file a joint status report proposing further proceedings and, if appropriate, a schedule for such proceedings.”
Cases below stay upon relief/discovery in the Fairholme Case
WASHINGTON FEDERAL………………………………Case No. 13-385C Common & Preferred
BRYNDON FISHER .........………………………………Case No. 13-608C Common
BRUCE REID .........………………………………………Case No. 14-152C Common
LOUISE RAFTER .........………………………………….Case No. 14-740C Common
Cases below stay 60 days after jurisdictional discovery in Fairholme Funds
JOSEPH CACCIAPALLE ………..………………………Case No. 13-466C Preferred
ARROWOOD INDEMNITY COMPANY .........…Case No. 13-698C Preferred
OWL CREEK ASIA I L.P...........……………………….Case No. 18-281C Preferred
AKANTHOS OPPORTUNITY MASTER FUND ...Case No. 18-369C Preferred
APPALOOSA INVESTMENT .........………………….Case No. 18-370C Preferred
CSS LLC ……………………………………………………….Case No. 18-371C Preferred
MASON CAPITAL L.P...........…………………………..Case No. 18-529C Preferred
Cases below stay pending disposition of Owl Creek
683 Cap. Partners v. United States……………….Case No. 18-711C Preferred
Patt v. United States…………………………………….Case No. 18-712C Preferred
This is not Einstein material, if the government takes something for $0.00001(or 79.9%) of a company that is not in financial distress the government takes something of value from those companies that doesn’t belong to the government, so it is a taking
Could be, but technically the warrant always has been 99.99999% out of the money, and therefore they obtained rights (future rights) in a company that had more value at the time when they obtained the warrant as according to Fannie’s 10-K in 2008 the warrant had a value of $3.5B on Sept 8 2008, that is recognizing value to something and not paying for it accordingly (via strike) makes it a taking
It is estimated the warrant has a value of $100B - $125B (according to Moelis Nov-18), then if the 79.9% stake is worth 100 to 125, the 20.1% would be worth $25.15B - $31.44B and that would be $21.50 to $ 27.50 per common share, that is when the warrant is exercised…
Then to receive legitimate rights they should have paid market conform price, and that is probably why in 2010 they tried to bring the common and pref price to zero, as they became aware they could never exercise the warrant if the company stayed above water, however they failed in that, as the company is too big to be worth nothing, and the lower the price got the more shares were sold and it had opposite effect and they recorded their lowest share price of 0,1901 on july 8, 2010 with 55M shares fannie sold
I agree with you, but he needs to have the same vision as plaintiffs have and although he agrees openly, he also disagrees openly, I do not understand the “in the money” part as they are as far “out of the money” as one could imagine, and therefore it would be ripe, but that could be a typo
A lot of documents throughout the cases contain ONLY “stipulation” not stipulation on time or other specifics, but only stipulation and that is suspicious, in an earlier case, this was also done and a few months later the case was settled dismissed, also in the class action there is a Stipulation and 4 months later a stipulation of Dismissal, that begs the question
SETTLEMENT EVIDENCE
It looks like there is no end to unraveling the facts, there is indeed
“SOME” kind of settlement going on, we don’t know if it is partial or a complete settlement, but some kind of settlement is going on, when you take a look at the Wazee street lawsuit, it started in December 2018, the stipulation order was completed on Aug 2, 2019, then go to Arrowood in this case they claim it is related to “other” sealed cases, which probably are “WASHINGTON FEDERAL , BRYNDON FISHER, BRUCE REID, LOUISE RAFTER, JOSEPH CACCIAPALLE, ARROWOOD INDEMNITY OWL CREEK, AKANTHOS, APPALOOSA, CSS, MASON, 683 Cap. Partners, Patt as other documents show these are related to each other, then the stipulation is granted “nunc pro tunc“ and on May 31, 2018 the case is related to the Joshua Angel case and just 10 days earlier on May 21, 2018 it was related to Perry(“nunc pro tunc“) then the angel case is again related to the Fairholme district court case and to Arrowood and to the Miscellaneous Class Action, and maybe other cases but I didn’t look into them yet, see for yourself and make your own conclusion and let me know ones you discover more
18-3478 WAZEE STREET OPPORTUNITIES FUND IV https://www.courtlistener.com/docket/7681282/wazee-street-opportunities-fund-iv-lp-v-the-federal-housing-finance-agency/
- Dec 28, 2018 STIPULATION to Modify Briefing Schedule on Pending Dispositive Motions by FHFA (there is a Dispositive Motions by FHFA)
- Feb 15, 2019 STIPULATION to Substitute Party by THE FEDERAL HOUSING FINANCE AGENCY, MELVIN L. WATT. (they want to probably delete Treasury as defendant as they are no longer mentioned as defendant )
- Jul 26, 2019 Stipulation (Regarding Certain Facts)
- Aug 2, 2019 Stipulation and Order(Settlement and time scedule)
Then go to
13-1439 ARROWOOD INDEMNITY COMPANY
https://www.courtlistener.com/docket/6995674/arrowood-indemnity-company-v-federal-national-mortgage-association/
- Feb 18, 2014 STIPULATION Regarding Briefing Schedule In All Cases by ARROWOOD
- Sep 20, 2013 NOTICE OF RELATED CASE by ARROWOOD INDEMNITY COMPANY, ARROWOOD SURPLUS LINES INSURANCE COMPANY, FINANCIAL STRUCTURES LIMITED. Case related to Case No. (See Form for Further Information).!!!
- Oct 4, 2017 STIPULATION / Joint Stipulation and Proposed Scheduling Order by ARROWOOD I
- Jan 18, 2018 STIPULATION re 70 Stipulation Amended Joint Stipulation and Proposed Scheduling Order by ARROWOOD
- Feb 1, 2018 ORDER granting amended joint stipulation and proposed scheduling Order.
- Feb 1, 2018 SCHEDULING ORDER approving Stipulation filed 10/4/2017, nunc pro tunc.
- May 31, 2018 NOTICE OF RELATED CASE by FHFA Case related to Case No. 1:18-cv-1142.
Then go to 18-1142 Joshua Angel and on appeal it has number 19-7072
18-1142 https://www.courtlistener.com/docket/6880882/angel-v-federal-home-loan-mortgage-corporation/
- May 21, 2018 NOTICE OF RELATED CASE by JOSHUA J. ANGEL. Case related to Case No. 13-1025 RCL.
- May 31, 2018 NOTICE OF RELATED CASE by FEDERAL HOUSING FINANCE AGENCY. Case related to Case No. 1:13-cv-1053, 1:13-cv-1439, 1:13-mc-1288.
- Jun 27, 2018 STIPULATION for Briefing Schedule on Forthcoming Motion to Dismiss by FHFA.
- Jun 27, 2018 ORDER: Per the parties' Stipulation, the Court ORDERS: (1) Defendants shall file their Motion to Dismiss on or before July 12, 2018; (2) Plaintiff shall file his Opposition on or before September 10, 2018; and (3) Defendants shall reply on or before October 10, 2018. Signed by Judge James E. Boasberg on 6/27/2018. (lcjeb3) (Entered: 06/27/2018)
Then go to
19-7072 https://www.courtlistener.com/docket/26534/joshua-angel-v-federal-home-loan-mortgage-co/
- Nov 4, 2019 CLERK'S ORDER [1814242] filed granting the joint motion to extend time [1813680-2], The following revised briefing schedule will now apply: APPELLEE Brief due on 12/12/2019. APPELLANT Reply Brief due 01/22/2020. DEFERRED APPENDIX due 01/29/2020. Final Briefs due 02/12/2020. [19-7062]
A little premature to “announce a name within the next few weeks” when litigation has not come to any meaningful conclusion yet, but there will be a settlement, lets toast to that !!!!!!!!!!!
So what does a Consent decree mean between FnF and the FHFA ?
The definition:
How Does a Consent Decree Work?
A consent decree is an order by a judge that is based on an agreement signed by the two parties. It's a way to come to an agreement that has the force of legal approval instead of having a lengthy and costly trial. The parties also don't have to deal with the uncertainty of the outcome of a trial. Of course, the consent decree can't be given unless the parties can agree.
https://www.thebalancesmb.com/what-is-a-consent-decree-how-does-it-work-4580322
“Consent”
now in order to get a “consent” degree from FnF we need look at the word “consent” first, this means the 2 parties are both agreeing voluntary to the same agreement, this is for the FHFA very worrisome, they forced the old BOD out, and installed a new BOD’s and chanced the companies to be run “for taxpayers” as the 10-K tells “we are no longer managed with a strategy to maximize shareholder returns.” Then it is logical the new BOD installed by the FHFA only thinks in what is the best interest of the FHFA, and because the FHFA statue says it MAY do what is in the best interest of the FHFA, the FHFA is run for profit and has no incentive to regulate, and puts their own interest first, and the regulate part ranks lower (as proven by their actions since 2008) another worrisome fact is the FHFA is funded by the companies they regulate, so they act in their own best interest and are funded by FnF and then they can implement policies regulations that nobody has any control over, and above all that NOBODY can challenge anything they say
“The parties”
To install or achieve a consent decree, we first must analyze who the parties are that are going into consent with each other, the FHFA is the first party as they have demands, but FnF canNOT be the second party as their 10-K says “we are no longer managed with a strategy to maximize shareholder returns.” So they certainly cannot represent shareholders, Then as a representative and holder of a controlling warrant that entitles them to 79.9% common shares of the company, we can say Treasury will be the second party to the consent decree as they will probably represent us, and because of their fiduciary duty they cannot enter into any damaging or controlling wishes, just as a fact, but then there is another issue, if FHFA and Treasury enter into a consent Decree with each other about something that will affect a third company it will not be constitutional, so we go back to the “not possible” version of FHFA and FnF entering into consent Decree. It will be FHFA that has the wishes, but FnF do not have wishes, Yeh get out of conservatorship but nothing else, so on that part there is no consent, maybe with the new BOD, but certainly not with the “old” BOD and current shareholders, as the two BOD’s pre/post conservatorship are in conflict of interest with each other. Then there is a possibility FHFA will promise to “exit conservatorship” with a wish list that contains capital demands and the same aspects as the SPSPA.
Wish list
Entering into the SPSPA, aside from the bargain (SPS and warrant) they also demand
“Each GSE’s retained mortgage and mortgage backed securities portfolio shall not exceed $850 billion as of December 31, 2009, and shall decline by 10% per year until it reaches $250 billion. “
https://www.fhfa.gov/Conservatorship/Documents/Senior-Preferred-Stock-Agree/2008-8-7_SPSPA_FactSheet_508.pdf
so treasury demands FnF to shrink their retained portfolio on what basis? Who came up with that? and why $250B and not $500B?, what is logic behind that? And what document shows a $250B amount to be rightful?
Conclusion
Then taking all things into account, a consent decree it not something FHFA can force as the “consent” is missing by lack of the shareholders BOD, so for now the Consent Decree is not the ultimate for them to achieve, probably the first thing they should do is stop acting like Don Quixote they cannot win this battle
Active Lawsuit cases in FnF with link and case number Jan-2020
19-422 Vide 19-563 Collins v. Mnuchin……………Common & Preferred
CLAIMS: “for cause” separation of powers
Supreme court https://www.scotusblog.com/case-files/cases/collins-v-mnuchin/
This was case 17-20364, the 5th circuit remanded this back to Judge Nancy F Atlas in District Court, S.D. Texas, a Petition for a writ of certiorari is filed in the SCOTUS by plaintiff, and the government also filed a petition for a writ of certiorari in this case
(DISTRIBUTED for Conference of 1/10/2020 but case was not decided, and redistributed to an unknown date)
17-2185 Bhatti vs. FHFA……………Common & Preferred
HONORABLE Patrick Joseph Schiltz
CLAIMS: 3th amendmend & “for cause” separation of powers
Latest Action: On appeal in the 8th circuit, Oral Argument 10/15/2019
http://media-oa.ca8.uscourts.gov/OAaudio/2019/10/182506.mp3
(The court strives to issue the opinion within 90 days after oral
argument or submission to a nonargument panel. http://media.ca8.uscourts.gov/newrules/coa/iops06-19update.pdf)
13-1288 Miscellaneous Class Action …Common & Preferred
HONORABLE Royce C. Lamberth
https://www.courtlistener.com/docket/4212341/in-re-fannie-maefreddie-mac-senior-preferred-stock-purchase-agreement/
Fact discovery closes on April 30, 2020
17-497 Rop v. Federal Housing Finance agency…….Common & Preferred
HONORABLE PAUL L. MALONEY
https://www.courtlistener.com/docket/13521280/rop-v-federal-housing-finance-agency/
No next Date available
18-3478 Wazee Street Opportunities Fund IV LP v. United States……………Common
HONORABLE NITZA I QUINONES ALEJANDRO
https://www.courtlistener.com/docket/7681282/wazee-street-opportunities-fund-iv-lp-v-the-federal-housing-finance-agency/
No next Date available
19-7062 JOSHUA J. ANGEL V. FREDDIE MAC…………….Preferred
Previously assigned to: HONORABLE Royce C. Lamberth
https://www.courtlistener.com/docket/26534/joshua-angel-v-federal-home-loan-mortgage-co/
Reply Brief due 01/22/2020
13-1053 Name: FAIRHOLME FUNDS, INC. v. FHFA……Preferred
HONORABLE Royce C. Lamberth
https://www.courtlistener.com/docket/4212077/fairholme-funds-inc-v-federal-housing-finance-agency/
Fact discovery Shall close on April 30, 2020, Trial is set for March 31, 2021 (with a pretrial 30-60 days before)
----------------------------------------------------
Active cases in Sweeney’s court
----------------------------------------------------
18-1124 Wazee Street Opportunities Fund IV LP v. United States……………Common
https://www.courtlistener.com/docket/7681282/wazee-street-opportunities-fund-iv-lp-v-the-federal-housing-finance-agency/
parties respectfully request that the Court extend the deadline for filing the status report due today until February 10, 2020. (http://webcache.googleusercontent.com/search?q=cache:RXygKT2qxQYJ:www.glenbradford.com/wp-content/uploads/2019/12/18-1124-0009.pdf+&cd=3&hl=en&ct=clnk&gl=us
13-465C FAIRHOLME FUNDS, INC. v. United States…………..Common & Preferred
Court: United States Court of Federal Claims
Proceeding: https://www.courtlistener.com/docket/4198608/fairholme-funds-inc-v-united-states/
January 10, 2020,(14 days extension I recall) the parties shall file a joint status report proposing further proceedings and, if appropriate, a schedule for such proceedings.”
Cases below stay upon relief/discovery in the Fairholme Case
WASHINGTON FEDERAL-------------------Case No. 13-385C Common & Preferred
BRYNDON FISHER .........………………………………Case No. 13-608C Common
BRUCE REID .........………………………………………Case No. 14-152C Common
LOUISE RAFTER .........………………………………….Case No. 14-740C Common
60 days after jurisdictional discovery in Fairholme Funds
JOSEPH CACCIAPALLE ………..………………………Case No. 13-466C Preferred
ARROWOOD INDEMNITY COMPANY .........…Case No. 13-698C Preferred
OWL CREEK ASIA I L.P...........……………………….Case No. 18-281C Preferred
AKANTHOS OPPORTUNITY MASTER FUND ...Case No. 18-369C Preferred
APPALOOSA INVESTMENT .........………………….Case No. 18-370C Preferred
CSS LLC ……………………………………………………….Case No. 18-371C Preferred
MASON CAPITAL L.P...........…………………………..Case No. 18-529C Preferred
And your referring to ?
this is not the SCOTUS case it is 19-422 and 19-563
Dec. 10, 2020?
Not sure what you are referring to, I thought it was about Seila/Collins/Treasury and their interconnection, sorry for that
The government first has to overcome the duress/coercion problem, after that is solved all options are open, but until then, nothing is possible IMO
It sure seems that way although not guaranteed yet, imo it will be too damaging for the government, so it will not happen(SCOTUS Taking the case), but that really is a guess, if you fast forward to the end of the saga(which did not happen yet) and look for possibilities the only thing that comes to my mind is they need to settle fast, if the SCOTUS does take the case, it will need to rule on the “for cause” and the FINAL action as “conservatorship itself” logically it implies the 3th amendment but it does not say the 3th amendment,
then if the SCOTUS DOES take the case and rules in favor of plaintiff, The FHFA is no longer independent and need to return the roughly 3.5B FHFA operational costs plus interest plus it must unwind the conservatorship itself, this is basically if conservatorship never happened and is the most expensive version
then if the SCOTUS DOES NOT take case and they proceed, the Lamberth court can give Direct damages, the Sweeney court can give Derivative money and FNF are on its feed again and the documents are “unsealed” and the government is facing public embarrassment, this will be by far the most expensive version in the long run and will drag on for decades
then if the SCOTUS DOES NOT take case and they settle, Hera will be amended conform the constitution, FHFA will no longer be independent due to changing the “for cause” removal, the senior preferred stock will be deemed as paid, the warrant will be voided, the junior preferred will be paid missed dividends and preferred stock will be retracted at par, then FHFA needs to confirm everything they did was unlawful, and that this will not EVER happen again in the future,(before this a consent decree cannot happen) then the damages and punitive damages are split in half for cooperating, then FHFA will pay a hundreds of billions to FnF that can be used for recapitalization, and they relist on a mayor stock exchange, they reinstall dividends again and off we go, this will be the cheapest option for FHFA and will have the most places to hide their wrongdoings
then of course there are a couple of unrealistic options like SCOTUS rules in favor of defendants and the constitution needs to be changed, Lamberth rules in favor of defendants and constitution needs to changed or Sweeney rules in favor of defendants and the constitution needs to be changed, but I do not see those as plausible options (SCOTUS,Lamberth,Sweeney separation of powers, HERA, constitutional issues, while HERA allows FHFA the constitution forbids a taking and it is done by an illegal agency, so violation separation of power, and all this is done in a duress situation)
you bet, a lot of hotel California
A Tale of Two Agencies: The Travails of the CFPB and FHFA
By Guest Blogger | January 9, 20200 Comment
Courtesy of Joseph A. Smith, Jr.
https://sites.duke.edu/thefinregblog/2020/01/09/a-tale-of-two-agencies-the-travails-of-the-cfpb-and-fhfa/
The Federal Housing Finance Agency (FHFA) and Consumer Financial Protection Bureau (CFPB) were established to address distinct aspects of the Global Financial Crisis. The Home Ownership and Economic Recovery Act of 2008 (HERA)[1] created the FHFA to provide for enhanced and rigorous supervision of Fannie Mae and Freddie Mac. The Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank)[2] created the CFPB in 2010 to regulate and enforce a variety of consumer protection laws—both the laws that were in force at the time of enactment and the new laws that Dodd-Frank created.
Each agency has made a significant impact—the FHFA through its conservatorship of Fannie Mae and Freddie Mac; the CFPB through a robust regulatory and enforcement program. Yet, both agencies are currently confronting serious challenges to their authority. These challenges come both from private parties adverse to the agencies and from the Government of which they are a part. And they bring with them novel and important questions about remedies regarding actions taken by regulatory officials without constitutional authority.
Constitutional Challenges to the FHFA and CFPB
The constitutional challenges to the FHFA and CFPB arise from the fact that both agencies are headed by a single Director, who is appointed by the President, confirmed by the Senate, and serves for a term of five years which is subject to removal only for cause.[3] This tenure of office is different from other federal financial regulatory agencies and, critics argue, from other federal agencies generally. The Comptroller of the Currency, who heads an agency housed in the Treasury Department, is appointed by the President, confirmed by the Senate, and serves a term of five years “unless sooner removed by the President, upon reasons to be communicated by him to the Senate.”[4] The Chairman, Vice Chairman, and Director of the Federal Deposit Insurance Corporation are each subject to Presidential appointment, Senate approval, and serve statutorily specified terms.[5] While there are no removal provisions in the Federal Deposit Insurance Act for these officials, that statute provides that the board may not have more than three members (out of five total) who are from the same political party.[6]
Actions by the Directors of the FHFA and CFPB have been challenged as unconstitutional because, it is alleged, the Directors’ tenure of office violates the Constitution. The argument goes that the inability of the President to remove the Director at will improperly impinges on the President’s authority under Article II to ensure that the laws of the United States are faithfully executed.The challengers contrast the Directors’ tenure to the “at will” tenure of executive agency heads or the multi-member commission structure of other independent agencies. It is argued that a single agency director removable only for cause has undue and unconstitutional freedom from accountability to the President. These claims have been presented, without success, to federal trial and appellate courts but not to the Supreme Court.[7]
That is about to change.On October 18, 2019, the Supreme Court granted a petition for certiorari in the case of Seila Law v. CFPB (Seila Law) to address the constitutionality of the CFPB’s Director’s tenure of office.[8] In addition, the Court is considering another certiorari petition from a decision by the Fifth Circuit Court of Appeals, in the case of Collins v. Mnuchin (Collins), that the tenure of the FHFA’s Director is unconstitutional.[9]
Seila Law and Collins
Seila Law is an appeal from the Ninth Circuit Court of Appeals’ affirmation in substantial part of the CFPB’s issuance of a civil investigative demand. The demand is part of an investigation into a debt adjustment operation of Seila Law LLC. It does not involve a final agency action by the CFPB. Despite the fact that the CFPB had prevailed on the constitutional issue at the appellate court level, the Solicitor General, acting on behalf of the CFPB and under instruction of the agency’s Director, submitted a response to plaintiff’s petition for certiorari that urged the Supreme Court to grant the petition and to determine that the CFPB Director’s tenure is unconstitutional.[10]
Collins, by contrast, involves a final agency action by the FHFA as conservator of Fannie Mae and Freddie Mac (Enterprises). The FHFA entered into a modification of financing agreements with the United States Treasury that resulted in a sweep by Treasury of the net worth (less a minimal reserve) of each of the Enterprises (Net Worth Sweep). Payments under the Net Worth Sweep arguably went beyond the amounts necessary to repay the Treasury for its extensions of credit to the Enterprises, thus reducing or eliminating the equity of their shareholders and keeping them on a short leash pending Congressional action to restructure the housing finance market.
Plaintiffs in Collins are shareholders of Fannie Mae and Freddie Mac. They have sued the Treasury and the FHFA claiming, among other things, that the FHFA’s agreement to the Net Worth Sweep exceeded the agency’s statutory authority as conservator. The plaintiffs further claimed that the Director of the FHFA, who allegedly acted ultra vires, held his position in violation of the United States Constitution. Therefore, the Director’s authorization of the Net Worth Sweep was invalid and the agreement under which the Net Worth Sweep was instituted should be rescinded.
After significant prior proceedings, the Fifth Circuit Court of Appeals, sitting en banc, determined that the plaintiffs’ statutory claim of the FHFA’s ultra vires action stated a claim on which relief could be granted, reversing a trial court determination to the contrary. The Court further found that the HERA provisions regarding the FHFA Director’s tenure were unconstitutional and directed the trial court to enter judgment to that effect. The Court then determined that any relief with respect to the constitutional claim would be prospective only. The case was remanded for further proceedings.[11]
Plaintiffs in Collins have petitioned for certiorari on the ground that the Fifth Circuit Court of Appeals did not provide for appropriate remediation of the constitutional breach. Defendants have separately sought certiorari to reverse the Fifth Circuit’s finding that the Net Worth Sweep was ultra vires, based on anti-injunction and succession provisions of the HERA.[12] The Court has not yet decided whether to grant either of these petitions.
Seila Law and Collins are anomalous, if not unique, in one respect: each is being appealed by a party that won at the appellate court level. So why did they appeal?
Motivation for the Appeals
The plaintiffs in Collins have appealed because, although a majority of the Fifth Circuit ruled for them on the unconstitutionality of the Director’s tenure, a separate majority held that any relief would be prospective only. In doing so, the appellate court effectively denied plaintiffs the remedy they sought based on such unconstitutionality: rescission of the amendment to the Treasury financing agreements that created the Net Worth Sweep.
Seila Law, on the other hand, appears to be motivated by the Administration changing its view about the CFPB. In June 2017, the Administration issued a white paper on financial regulation that included a detailed and critical analysis of the CFPB. The white paper quotes an opinion of then-Judge Brett Kavanaugh, when on the Court of Appeals for the DC Circuit, that the Director’s tenure is unconstitutional in support of its policy critique of the CFPB as insufficiently accountable to either the President or Congress. However, its specific recommendations assign to Congress the tasks of: (i) amending the CFPB’s enabling legislation to repeal the “for cause” termination clause or replace that office with a commission structure; and (ii) subjecting the agency to Congressional and administrative budgetary restrictions. Such legislative proposals have either not been pursued by the Administration or have not been successful, if pursued. It appears that the Administration is using litigation instituted by a private party as a vehicle to achieve its policy objective.
The Administration’s views about the FHFA are arguably more nuanced. In September, 2019, Treasury issued a white paper on housing finance reform that says little or nothing about the FHFA’s organizational structure; rather, it recommends Congressional action to restructure the Enterprises, increase competition in the housing finance market, and reduce Federal Governmental exposure to losses. It also recommends administrative action by the FHFA to, among other things, end the Net Worth Sweep. The FHFA has recently taken administrative steps consistent with Treasury’s recommendations. Even here, there appears to have been something of a change of view by the Administration: in Collins, Treasury has conceded the claim that the FHFA Director’s tenure is unconstitutional, leaving the agency to fend for itself.
Given the similarity of the tenure clauses in the two relevant enabling statutes, it is interesting to note that the Administration is seeking a ruling of unconstitutional tenure in Seila Law but resisting such a determination in Collins. In a response to the petition for certiorari in Collins, the Solicitor General argues that the petition should not be granted as to the constitutional claim because (i) plaintiffs won at the appellate level (hence an appeal is inappropriate from them); (ii) Seila Law will decide the issue of the constitutionality of tenure; and (iii) the Fifth Circuit’s determination of the appropriate remedies was correct. The Solicitor General goes on to argue that the Court should grant defendants’ petition for certiorari as to the Fifth Circuit’s decision on the statutory (ultra vires) claim on the ground that it was incorrectly decided, and should follow the decisions of other appellate courts denying such claims. In sum, the Solicitor General proposes that Collins be resolved on statutory grounds without the need of addressing the constitutional issue. This line of argument leaves the issue of consequences open for the FHFA if Seila results in a determination of unconstitutionality.[13]
Potential Consequences
What would be the consequences for the CFPB if the Supreme Court makes such a determination? The Solicitor General’s brief in Seila and statements from the CFPB in connection with it, say that such a determination would be a matter of little or manageable practical consequence. The provisions of the Dodd-Frank Act creating the CFPB have a “savings clause” that provides that finding any provision as unconstitutional does not invalidate the rest of the statute. The Solicitor General and the agency argue that the Supreme Court, should, following the statute and Free Enterprise Foundation v. PCAOB, “blue pencil” the “without cause” phrase, thus making the CFPB a more traditional executive agency and leaving the remainder of the statute unaffected. This argument might be tenable if the CFPB had just come into existence, but that is not the case. The agency has been operating for eight years. It has taken innumerable actions through its Director, both regulatory and enforcement. Such actions include the assessment of billions of dollars in fines, issuance of hundreds (if not thousands) of pages of regulations, and the commencement and prosecution of hundreds (if not thousands) of investigations and civil litigation. While the Court may resolve the alleged issue of constitutional infirmity going forward, it is not clear what effect such a determination—that the CFPB has been constitutionally flawed from its inception—will have on actions taken to date.
The same issues confront the FHFA, whether its Director’s tenure is invalidated now or later. The alleged constitutional defect addressed in Collins was present from the passage of HERA and has been present throughout the FHFA’s eleven-year history. Blue penciling the tenure provision of the enabling legislation does not delete the legislation’s statement that the FHFA is an “independent” Government agency. Nor does it delete the legislation’s provisions under which the FHFA acts through the Director, including the appointment of the agency as conservator. If the Director was unconstitutionally seated in a way that invalidates actions taken in that capacity, how can the conservatorship of Fannie Mae and Freddie Mac withstand scrutiny?
I have good company in my concern about judicial alteration of a statute. In an amicus brief, three Republican United States Senators also oppose blue penciling. They argue that severing an unconstitutional provision from a statute is judicial legislation, resulting in a law the Congress did not pass and the President did not sign. While I agree with this assessment, I respectfully part company from the Senators when it comes to proposed remedies for unconstitutionality. They argue that the appropriate remedy is provided by the Administrative Procedure Act: enjoining the enforcement of the civil investigative demand that is the subject of the case. Since the alleged constitutional defects of the CFPB and FHFA relate to the structure and operations of the agencies, this proposed remedy would mean that no action of either agency could withstand challenge under the APA. In other words, the agencies would be out of business unless, and until, Congress corrected the defect.
Conclusion
Seila Law and Collins are cases that need not be before the Supreme Court. Each could, and in my view should, have been decided on other grounds by lower courts. Each invites the Court to restructure agencies of Government that have been in existence for years. The argument that the alleged constitutional infirmity in each agency can be cured by merely “blue penciling” the offending provision with little practical consequence is a judicial fiction; the logic of the plaintiffs’ arguments goes much further, undermining everything the agencies have done to date, and perhaps even their existence as functioning arms of government.
The FHFA and CFPB may or may not have the best or most desirable organizational structures from a policy perspective, but those structures were debated in public and enacted by elected representatives of the people. There are good policy arguments to have each agency, or both, reconstituted as more traditional executive agencies or more traditional independent commissions with bipartisan membership. The appropriate place to have those debates is where the process started—in Congress.
[1]Housing and Economic Recovery Act of 2008. (PUBLIC LAW 110–289—JULY 30, 2008) Available at:https://www.congress.gov/110/plaws/publ289/PLAW-110publ289.pdf
[2]Dodd-Frank Wall Street Reform and Consumer Protection Act. (PUBLIC LAW 111–203—JULY 21, 2010), Title X. Available at: https://www.govinfo.gov/content/pkg/PLAW-111publ203/pdf/PLAW-111publ203.pdf.
[3]HERA, op cit. Note 1, §1312(b); Dodd-Frank, op cit. Note 2, §1011(b), 12 USC 5491(b). The Director of FHFA is removable “for cause by the President.” The CFPB Director is removable for “inefficiency, neglect of duty or malfeasance in office.”
[4]National Bank Act, 12 USC § 2.
[5]16 USC § 1812.
[6]Ibid.
[7]A petition for a writ of certiorari as to the constitutionality of tenure of the CFPB’s Director, among other issues has previously been denied. State National Bank of Big Spring v. Mnuchin (18-307; January 14, 2019). It is of at least passing interest that the petition in this case included in its arguments allegation of a split among the circuits: the decision of the DC Circuit in PHH v. CFPB affirming constitutionality on the one handand the Fifth Circuit in an opinion rendered in the early stages of Collins v. Mnuchin denying it on the other..
[8]Seila Law LLC v. Consumer Financial Protection Bureau (19-7; filed June 28, 2018).
[9]Collins v. Mnuchin (19-422). Available at: https://www.scotusblog.com/case-files/cases/collins-v-mnuchin/.
[10]Seila Law v. CFPB, Brief for Respondent. Available at: https://www.supremecourt.gov/DocketPDF/19/19-7/116040/20190917144324154_19-7%20Seila%20Law.pdf.
[11]Collins v. Mnuchin, 938 F.3d 553, 563 (5th Cir. 2019).
[12]Mnuchin v. Collins (19-563; filed October 25, 2019). Available at: https://www.supremecourt.gov/DocketPDF/19/19-563/120380/20191025201313249_Mnuchin%20FINAL.pdf.
[13]It is of at least passing interest that counsel for the plaintiffs in Collins has filed an amicus brief in Seila.
Category: CFPB Litigation Tags: Joseph Smith
Summary of REDACTIONS in Washington Federal’s (13-385) FIRST AMENDED COMPLAINT
https://www.courtlistener.com/recap/gov.uscourts.uscfc.28070/gov.uscourts.uscfc.28070.70.0_1.pdf
Page 7(4.) probably a report from MS that concludes 'Forgery And Fraud'
Page 8(6.) probably FHFA’s August 22, 2008 letters, that state FnF soundness
Page 11(11.) probably proofs FnF were solvent and because of false narrative of their financial distress the DTA needed reduced
Page 23(46.) probably a statement of Secretary Geithner approving or applauding an increase of their retained portfolio
Page 23(47.) probably a journal or financial result that shows OFHEO is flip flopping capital restraints
Page 26(54.) F) probably about a statement former speechwriter for President George W. Bush, made about What to Do about Them http://people.stern.nyu.edu/svnieuwe/econvoice_ARVNW.pdf
g) & h) unknown context but probably about the flip flopping of capitalization standard, that a week later FnF miraculously became under-capitalized
Page 28(57.) probably news coverage that the governments opinion is now indeed undercapitalized
Page 28(58) probably about https://fcic-static.law.stanford.edu/cdn_media/fcic-docs/2008-09-04%20FHFA%20Dickerson%20ltr%20to%20Fannie%20Mae%20Mudd%20-%20Mid-year%20letter.pdf
That proofs here is some serious flip flopping going on, “and we even put a confidential stamp on it” LOL
Page 29(59.) probably proof about (58.) that they openly stated the undercapitalization
Page 29(60.) probably a secondary proof of (58)
Page 29(61.) probably statement or report from MS that says FnF are undercapitalized while two other letters (to Mudd & Syron) proof the opposite just 13 days earlier
Page 30(62.) probably a statement from FHFA’s DeLeo that says FHFA concluded FnF are undercapitalized
Page 30(63.) probably the same statement as (62.) but a different part of it with her proving MS also confirmed her undercapitalization fabrication
Page 32(70.) probably excerpt of document or email from GT, that says the PSPA has nothing to do with the financial solvency, or is asking reasons as to why they think the PSPA has any meaning in financial solvency
Page 33(71.) probably a statement in a document after conservatorship that proves the old BOD thought the terms of the PSPA were too harch
Page 33(73.) probably several quotes from officials who at the time said FnF in the future will no longer exist in prior form and a wind down scenario is in place
Page 36(79.) probably something from treasury and FDIC admitting the decrease in value of the preferred and common stock value
Page 40(88.) the most important one. probably a script from a meeting between the BOD and FHFA/Treasury that proves they entered with Coercion/Duress into the conservatorship (UST00530714.) (later Judge Sweeney quotes this section as death grip)
Page 40(89.) probably breathtaking Script that proves ”the highly unusual provision in HERA, that immunized the Companies’ directors against liability for consenting to the appointment of the FHFA as conservator. See 12 U.S.C. § 4617(a)(6).”
Page 41(90.) probably an agency who has criticism on FnF management and board of directors, it later goes on with the (89.) script and ex Freddie CEO Syron “that the letter was there as a mechanism to bring about a result”. (later Judge Sweeney quotes this as either agree or you’re out”)
Page 42(92.) probably proof of a meeting quote or fraise that “Suddenly” the BOD agreed to the terms while all the other documents prove there is still uncertainty to approve
Page 43(93.) probably this is about the same meeting as (92.) but goes on with more quotes from either Paulson or Lockhart stating unconstitutional things
Page 45(100. &101. ) have no context and are 100% Redacted
Page 51(127.) probably a document from BlackRock that confirms Freddie’s core capital only decreased from $37.9B to 37.1B and was not depleted and fannie core capital increased from $45.4B to $47.0B
Page 54(135.) probably a document from BlackRock that proof solvency two weeks before conservatorship
Page 56(146.) probably proof of the government mantra “we are rescuing FnF because they are insolvent” (while they were not) and proof of all the Smoke and mirrors they used to prove their point
Page 62(156.) probably a BlackRock document that proves Freddie’s future condition would be solvent
Page 65(166.) probably documents that show FnF could pay the non-market conform 10% interest rate and simultaneously pay down the liquidation preference and be profitable in the foreseeable future
Page 65(167.) probably document(s) from discovery or document numbers that show treasury and FHFA know they would be profitable in the foreseeable future
Page 66(169 &170.) have no context
Page 67(174.) has no context
4. Specifically, shortly after HERA was passed, the Government designed and
implemented a secret plan to take over the Companies from their shareholders. Treasury hired Wall Street investment firm Morgan Stanley to provide a financial basis for taking over the Companies “Redacted --------Redacted---------Redacted---------- Redacted --------Redacted---------Redacted---------- Redacted --------Redacted---------Redacted----------
.” Unsurprisingly, Morgan Stanley’s analysis concluded, as the Government
had asked it to conclude, that the Companies needed to be taken over.
Page 7(4.) probably a report from MS that concludes 'undercapitalisation'
6. The startling reversal of the Government’s position, on September 4, 2008, just thirteen days after the FHFA’s Notice of Proposed Capital Classification acknowledging that each of the Companies was adequately capitalized, when the FHFA suddenly changed course and sent letters to each of the Companies withdrawing its August 22, 2008 classifications, was not the result of real concerns with the Companies. Instead it was the beginning of the Government’s elaborate scheme to justify the takeover of Fannie Mae and Freddie Mac, by suddenly raising “critical concerns” regarding purported capital shortfalls, mismanagement by the Companies’ officers and directors, and purported questions regarding Freddie Mac’s accounting. These purported “critical concerns” had no basis in fact and were directly contradicted by the FHFA’s August 22, 2008
letters, Redacted---------- Redacted --------Redacted---------Redacted---------- Redacted---------- Redacted --------Redacted---------Redacted---------- Redacted---------- Redacted --------Redacted---------Redacted---------- Redacted---------- Redacted --------Redacted---------Redacted----------
Page 8(6.) probably FHFA’s August 22, 2008 letters, that state FnF soundness
11. The FHFA, continuing the Government’s policy of eliminating all shareholder
value in the Companies and perpetuating the false narrative of their financial distress, forced
Fannie Mae and Freddie Mac to substantially increase their loan loss reserves and unnecessarily reduce the value of their applicable deferred tax assets. After the conservatorships were imposed, Redacted---------- Redacted --------Redacted--------- Redacted---------- Redacted --------Redacted--------- Redacted---------- Redacted --------Redacted--------- Redacted---------- Redacted --------Redacted--------- See FHFA00057820. This was done largely to absorb the additional risk exposure caused by the
Government instructing the Companies to take on more subprime assets and guarantee more MBS
at the height of the financial crisis. It also created the appearance that the Companies were less
adequately capitalized than was actually the case, which further fostered the inaccurate perception
that the Companies needed large amounts of additional capital going forward—capital that the
Treasury was only too willing to provide in exchange for enormous, cumulative dividend payments
made pursuant to a predatory lending arrangement that benefited the Government and the public,
but destroyed the private property interests of the Companies’ outstanding preferred and common
shareholders. By 2012, after roughly four years of being under the Government imposed
Page 11(11.) probably proofs FnF were solvent and because of false narrative of their financial distress the DTA needed reduced
46. Faced with directives from Congress and agency regulators to accumulate subprime
and Alt-A holdings, the Companies did so, but they still remained adequately capitalized. As
Fannie Mae’s former CEO, Daniel Mudd, later explained, “Fannie Mae faced the danger that the
market would pass us by. . . . We were afraid that lenders would be selling products we weren’t
buying and Congress would feel like we weren’t fulfilling our mission. The market was changing,
and it’s our job to buy loans, so we had to change as well.” As Secretary Geithner acknowledged
in 2000, Redacted---------- Redacted --------Redacted--------- Redacted---------- Redacted --------Redacted--------- Redacted---------- Redacted --------Redacted--------- Redacted---------- Redacted --------Redacted--------- UST00479918.
Page 23(46.) probably a statement of Secretary Geithner approving or applauding an increase of their retained portfolio
47. On March 19, 2008, OFHEO further exacerbated the Companies’ accumulation of
high risk holdings by easing their capital restraints from 30% to 20 in exchange for the Companies’
agreement to raise “significant capital” at an indeterminate point in the future. After Fannie Mae
raised $7.4 billion, OFHEO further lowered the capital surcharge from 20% to 15%. Redacted --------Redacted--------- Redacted---------- Redacted --------Redacted--------- Redacted---------- Redacted --------Redacted---------UST00037193, at pg. 19, -37211.
Page 23(47.) probably a journal or financial result that shows OFHEO is flip flopping capital restraints
54. Much like the positive statements made by members of Congress with the passage
of HERA, in the months preceding the imposition of the Conservatorship, Government officials
acknowledged the adequate capitalization of the Companies on numerous occasions, including the
following:
a) a June 9, 2008 News Release issued by OFHEO stating that the Director
“classified Fannie Mae and Freddie Mac as adequately capitalized as of March
31, 2008,” and that the Companies were maintaining “overall capital levels well
in excess of the requirements.” UST00037193.
b) the July 10, 2008 testimony of Federal Reserve Chairman Ben Bernanke before
the House Financial Services Committee that Fannie Mae and Freddie Mac were
both “adequately capitalized.”
c) the July 10, 2008 testimony of Secretary Paulson to the House Banking
Committee that OFHEO “has made clear that [Fannie Mae and Freddie Mac] are
adequately capitalized.”
d) the July 10, 2008 News Release issued by the OFHEO Director in which he stated:
“As I have said before, they [Fannie Mae and Freddie Mac] are adequately
capitalized, holding capital well in excess of the OFHEO-directed requirement,
which exceeds the statutory minimums. They have large liquidity portfolios,
access to the debt market and over $1.5 trillion in unpledged assets.”
e) Secretary Paulson’s July 15, 2008 testimony to the Senate Banking Committee
confirming the adequacy of the Companies’ capitalization.
f) A July 15, 2008, message Redacted---------- Redacted --------Redacted--------- Redacted---------- Redacted --------Redacted---------that stated:
Redacted---------- Redacted --------Redacted---------
Redacted---------- Redacted --------Redacted---------
Redacted---------- Redacted --------Redacted---------
Redacted---------- Redacted --------Redacted---------
Redacted---------- Redacted --------Redacted---------
Redacted---------- Redacted --------Redacted---------
Redacted---------- Redacted --------Redacted---------
Redacted---------- Redacted --------Redacted---------
FHFA00065630-65631 (emphasis added).
g) A July 22, 2008 email to Treasury officials Redacted---------- Redacted --------Redacted---------
Redacted---------- Redacted --------Redacted---------Redacted---------- Redacted --------Redacted---------
Redacted --------Redacted---------Redacted---------- Redacted --------Redacted---------FHFA00064783. He repeated this in another message two days later, Redacted --------Redacted--------- Redacted -------- Redacted--------- Redacted --------Redacted--------- Redacted -------- Redacted--------- Redacted --------Redacted--------- Redacted -------- Redacted--------- Redacted --------Redacted--------- Redacted -------- Redacted--------- Redacted --------Redacted--------- Redacted -------- FHFA00065367 (emphasis added).
h) A July 30, 2008, conference call Redacted--------- Redacted ---- Redacted--------- Redacted ---- Redacted--------- Redacted ---- Redacted--------- Redacted ---- Redacted--------- Redacted ---- Redacted--------- Redacted ---- Redacted--------- Redacted ---- Redacted--------- Redacted ---- Redacted--------- Redacted ---- Redacted--------- Redacted ---- Redacted--------- Redacted ---- Redacted--------- Redacted ---- Redacted--------- Redacted ---- Redacted--------- Redacted ---- Redacted--------- Redacted---- Redacted--------- Redacted ---- Redacted--------- Redacted ---- Redacted--------- Redacted ---- Redacted--------- Redacted ---- Redacted--------- Redacted ---- Redacted--------- Redacted ---- Redacted--------- Redacted ---- Redacted UST00337442-373443.
Page 26(54.) F) probably about a statement former speechwriter for President George W. Bush, made about What to Do about Them http://people.stern.nyu.edu/svnieuwe/econvoice_ARVNW.pdf
g) & h) unknown context but probably about the flip flopping of capitalization standard, that a week later FnF miraculously became under-capitalized
57. As late as September 4, 2008, news reports acknowledged that --------- Redacted ---- Redacted--------- Redacted----Redacted--------- Redacted ---- Redacted--------- Redacted ---- Redacted--------- Redacted ---- Redacted- UST00497064.
Page 28(57.) probably news coverage that the governments opinion is now indeed undercapitalized
D. While Stating Publicly that the Criteria For Conservatorship Were Not Satisfied, the
Government Planned in Secret to Seize the Companies Regardless of Their Financial
Condition
58. While saying publicly, until just days before the sudden and dramatic reversal of
its position, that the Companies were adequately capitalized and that the “bazooka” of
conservatorship would not need to be used, behind the scenes the Government was secretly
creating a severely overstated record to justify seizing control of them. By September 1, 2008, the
Government had decided to impose the conservatorships imminently. But the purported
justification for its decision was significantly undermined by the recent, August 22, 2008 FHFA
letters opining that each of the Companies was adequately capitalized, which stood in stark contrast
to the grounds necessary to force the Companies into conservatorships under HERA. Recognizing
this serious contradiction, FHFA abruptly reversed course Redacted--------- Redacted ---- Redacted--------- Redacted--------- Redacted ---- Redacted--------- Redacted--------- Redacted ---- Redacted--------- Redacted--------- Redacted ---- Redacted--------- Redacted--------- Redacted ---- Redacted---------
UST00528009, at UST00528143-44.
Page 28(58) probably about https://fcic-static.law.stanford.edu/cdn_media/fcic-docs/2008-09-04%20FHFA%20Dickerson%20ltr%20to%20Fannie%20Mae%20Mudd%20-%20Mid-year%20letter.pdf
That proofs here is some serious flip flopping going on, “and we even put a confidential stamp on it” LOL
59. Shortly thereafter Redacted--------- Redacted ---- Redacted--------- Redacted--------- Redacted ---- Redacted--------- Redacted--------- Redacted ---- Redacted--------- Redacted--------- Redacted ---- Redacted--------- Redacted--------- Redacted ---- Redacted--------- Redacted--------- Redacted ---- Redacted--------- Redacted---------Redacted----- Redacted--------- Redacted--------- Redacted ---- Redacted---------
Page 29(59.) probably proof about (58.) that they openly stated the undercapitalization
60. In addition Redacted--------- Redacted---------Redacted----- Redacted--------- Redacted---------Redacted----- Redacted--------- Redacted---------Redacted----- Redacted--------- Redacted---------Redacted----- Redacted--------- Redacted---------Redacted----- Redacted--------- Redacted---------Redacted----- Redacted--------- Redacted---------Redacted----- Redacted--------- Redacted---------Redacted----- Redacted--------- Redacted---------Redacted-----
Page 29(60.) probably a secondary proof of (58)
61. The financial basis for claiming capital deficits at each of the Companies had been
developed under highly secretive conditions with assistance from Wall Street investment firm
Morgan Stanley. Redacted----- Redacted--------- Redacted----- Redacted--------- UST00530312 ). Morgan Stanley’s misleading calculations were directly contradicted by the FHFA’s letters of August 22, 2008 (just 13 days earlier) acknowledging that both Fannie Mae and Freddie Mac were
“adequately capitalized.” Aug. 22, 2008 Letter to Mudd; Aug. 22, 2008 Letter to Syron. The
Morgan Stanley Redacted----- Redacted--------- Redacted----- Redacted--------- Redacted----- Redacted--------- Redacted----- Redacted--------- Redacted----- Redacted--------- Redacted----- Redacted--------- Redacted----- Redacted--------- Redacted----- Redacted--------- Redacted----- Redacted--------- Redacted----- Redacted--------- Redacted----- Redacted--------- Redacted----- Redacted--------- Redacted----- Redacted--------- (Emphasis added.)
Page 29(61.) probably statement or report from MS that says FnF are undercapitalized while two other letters (to Mudd & Syron) proof the opposite just 13 days earlier
62. Perhaps most revealing, the truth of the Government’s pretext for imposition of the
conservatorships was disputed by FHFA’s own chief accountant, Wanda DeLeo, in a September
8, 2008, meeting with Freddie Mac’s auditor Price Waterhouse Cooper (“PwC”). At this meeting,
Ms. DeLeo Redacted----- Redacted--------- Redacted----- Redacted----- Redacted--------- Redacted----- Redacted----- Redacted--------- Redacted----- Redacted----- Redacted--------- Redacted----- Redacted----- Redacted--------- Redacted----- Redacted----- Redacted--------- Redacted----- Redacted----- Redacted--------- Redacted----- Redacted----- Redacted--------- Redacted----- Redacted----- Redacted--------- Redacted----- Redacted----- Redacted--------- Redacted----- Redacted----- Redacted--------- Redacted----
Page 30(62.) probably a statement from FHFA’s DeLeo that says FHFA concluded FnF are undercapitalized
63. Ms. DeLeo further acknowledged that Morgan Stanley Redacted----- Redacted----- Redacted--------- Redacted----- Redacted----- Redacted--------- Redacted----- Redacted----- Redacted--------- Redacted----- Redacted----- Redacted--------- Redacted----- Redacted----- Redacted--------- Redacted----- Redacted----- Redacted--------- Redacted----- Redacted----- Redacted---------
Page 30(63.) probably the same statement as (62.) but a different part of it with her proving MS also confirmed her undercapitalization fabrication
E. The Government Seized Control of the Companies, Falsely Portraying the
Conservatorships as a Rescue Operation
70. In fact, Grant Thornton LLC, the financial consultant firm hired by Treasury after
the conservatorships were implemented to estimate a value for the preferred stock held by the
Government, had trouble valuing Treasury’s stake in the Companies because it found that the terms
of the PSPA actually had nothing to do with the Companies’ financial solvency:
Redacted----- Redacted----- Redacted
Redacted----- Redacted----- Redacted
Redacted----- Redacted----- Redacted
Redacted----- Redacted----- Redacted
Redacted----- Redacted----- Redacted
Redacted----- Redacted----- Redacted
Redacted----- Redacted----- Redacted
Redacted----- Redacted----- Redacted
Redacted----- Redacted----- Redacted
FHFA00028624, at -28630.
Page 32(70.) probably excerpt of document or email from GT, that says the PSPA has nothing to do with the financial solvency, or is asking reasons as to why they think the PSPA has any meaning in financial solvency
71. Even after the conservatorship, Freddie Mac management met to discuss
amendments to the harsh terms of the PSPA Redacted----- Redacted----- Redacted----- Redacted----- Redacted----- Redacted----- Redacted----- Redacted----- Redacted----- Redacted----- Redacted----- Redacted----- Redacted----- Redacted----- FHFA00091724, p. 3.
Page 33(71.) probably a statement in a document after conservatorship that proves the old BOD thought the terms of the PSPA were too harch
73. However, from the beginning of the conservatorships, the Government’s intention
and ultimate goal was never to restore the Companies to their shareholders, but rather to take a
first step to “wind down” (i.e., dissolve) the Companies, pending action by Congress:
-In an October 2008 speech, Chairman Bernanke agreed with
Paulson that the conservatorships “can usefully be viewed as a
“time out”--one that will give everyone involved, especially the
Congress, the opportunity to reconsider the appropriate roles of
Fannie and Freddie in the U.S. mortgage market.”
FHFA00005353, at -5354.
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-In a March 8, 2011 speech, by FHFA Acting Director Edward J.
DeMarco, he admitted that:
As conservator, FHFA stands in the shoes of the Enterprises’
shareholders. Given the structure of Treasury’s preferred stock
purchase agreements with the Enterprises, the entity with the
greatest economic interest in the Enterprises today is the
taxpayer Thus, we are preserving and conserving the assets
principally for taxpayers so that they may realize the greatest
possible return from these assets, whatever the final form of the
companies’ transformation ends up being. We do this with a
clear expectation that Fannie Mae and Freddie Mac, as we
have known them, will no longer exist. But we do not know
when, or in what fashion, this will happen. UST00531840, at -
531850 (emphasis added).
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-December 11, 2011 testimony by Halderman where he stated
that “the terms of Freddie Mac’s Preferred Stock Purchase
Agreement with Treasury were explicitly designed to make it
difficult if not impossible for [Freddie Mac] to emerge from
conservatorship and for shareholders to recoup any value from
their investments.” Haldeman explained that the ten-percent
dividend on funds received from the Treasury was “by design to
ensure that the [Companies] could not emerge from
conservatorship and that shareholders would not benefit from
federal support,” and “necessitate[ed] additional requests for
Treasury funds.”
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On August 17, 2012, in announcing the execution of the Third
Amended Stock Agreements (the “Third Amendment”),
Director DeMarco stated that the amendment merely reaffirmed
the Government’s Strategic Plan for the conservatorships of the
Companies, including “gradually contracting their operations.”
FHFA Statement, Changes to Fannie Mae and Freddie Mac
Preferred Stock Purchase Agreements (Aug. 17, 2017).
Page 33(73.) probably several quotes from officials who at the time said FnF in the future will no longer exist in prior form and a wind down scenario is in place
F. The Government’s Imposition of the Conservatorships Improperly Appropriated the Private Property of the Companies’ Preferred and Common Shareholders
79. The Treasury department, as well as the Federal Deposit Insurance Corporation
(FDIC), Redacted----- Redacted----- Redacted----- Redacted----- Redacted----- Redacted----- Redacted----- Redacted----- Redacted----- Redacted----- Redacted----- Redacted----- Redacted----- Redacted----- Redacted----- FHFA00004508.
Page 36(79.) probably something from treasury and FDIC admitting the decrease in value of the preferred and common stock value
1. Neither of the Companies’ Shareholders or Boards of Directors Validly
Consented to the Conservatorships
a. Neither of the Companies’ Shareholders Consented to the
Conservatorships
b. Neither of the Companies’ Boards of Directors Validly Consented to
the Conservatorships
87. Even if the consent of the boards of directors of the Companies was sufficient, this
“consent” was legally invalid because it was obtained through misrepresentation and duress.
88. The coercive nature of the Government’s strategy to obtain board consent is clearly
Evident Redacted-------Redacted---------- Redacted-------Redacted---------- Redacted-------Redacted---------- Redacted-------Redacted----------
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UST00530714.
Page 40(88.) the most important one. probably a script from a meeting between the BOD and FHFA/Treasury that proves they entered with Coercion/Duress into the conservatorship (UST00530714.)
89. The extortionate nature of this “script” is breathtaking. Redacted---------- Redacted------- Redacted---------- Redacted------- Redacted---------- Redacted------- Redacted---------- Redacted------- Redacted---------- Redacted------- Redacted---------- Redacted------- Redacted---------- Redacted------- Redacted---------- Redacted------- Redacted---------- Redacted------- Redacted---------- Redacted------- Redacted---------- Redacted------- Redacted---------- Redacted------- Redacted---------- Redacted------- Redacted---------- Redacted------- Redacted---------- Redacted------- Redacted---------- Redacted------- Redacted---------- Redacted------- Redacted---------- Redacted------- Redacted---------- Redacted------- Redacted---------- Redacted------- Redacted---------- Redacted------- Redacted---------- Redacted------- Redacted---------- Redacted------- Redacted---------- Redacted------- Redacted---------- Redacted------- Redacted---------- Redacted------- Redacted---------- Redacted------- Redacted---------- Redacted------- Redacted---------- Redacted------- Redacted---------- Redacted------- Redacted---------- Redacted------- Redacted---------- Redacted------- Redacted---------- Redacted------- Redacted---------- Redacted------- Redacted---------- Redacted------- Redacted---------- Redacted-------On the other hand, the Government had already cleared the decks with respect to any concerns the directors might have regarding a potential breach of their fiduciary duties by consenting when there was an insufficient basis to do so. The Government artfully avoided this potential issue when it included the highly unusual provision in HERA that immunized the Companies’ directors against liability for consenting to the appointment of the FHFA as conservator. See 12 U.S.C. § 4617(a)(6).
Page 40(89.) probably breathtaking Script that proves ”the highly unusual provision in HERA, that immunized the Companies’ directors against liability for consenting to the appointment of the FHFA as conservator. See 12 U.S.C. § 4617(a)(6).”
90. Redacted---------- Redacted------- Redacted---------- Redacted------- Redacted---------- Redacted------- Redacted---------- Redacted------- Redacted---------- Redacted------- Redacted---------- Redacted------- Redacted---------- Redacted------- Redacted---------- Redacted------- Redacted---------- Redacted------- Redacted---------- Redacted------- Redacted---------- Redacted------- Redacted---------- Redacted------- the September 4, 2008 Letter to Fannie Mae also identified purported “failures
by the board and senior management” of the Company. FCIC Report 318-319; Sept. 4, 2008 letter
to Mudd. The September 4, 2008 Letter to Freddie Mac was even more severe in its criticism of
its management and board of directors, disclosing that FHFA had purportedly “lost confidence in
the Board of Directors and the executive management team,” holding them accountable for
purported losses stemming from “a series of ill-advised and poorly executed decisions and other
serious misjudgments.” FCIC Report 318-319; Sept. 4, 2008 Letter to Syron. These allegations
followed the Government’s “script” by Redacted---------- Redacted------- Redacted---------- Redacted------- Redacted---------- Redacted------- Redacted---------- Redacted------- Redacted---------- Redacted------- Redacted---------- Redacted------- As Former Freddie Mac CEO Syron later told the FCIC, “there was a
very clear message that the [September 4] letter was there as a mechanism to bring about a result.”
Former Fannie Mae CEO Mudd agreed that “the purpose of the letter was really to force
conservatorship.” FCIC Report, p. 320.
Page 41(90.) probably an agency who has criticism on FnF management and board of directors, it later goes on with the (89.) script and ex Freddie CEO Syron “that the letter was there as a mechanism to bring about a result”. (later Judge Sweeney quotes this as either agree or you’re out”)
92. To implement the Government’s plan to force Freddie Mac and Fannie Mae into
conservatorship, Treasury decided to hold meetings with the Companies’ directors on September
5, 2008, in order to force them into consenting to the imposition of the conservatorships. Redacted---------- Redacted------- Redacted---------- Redacted---------- Redacted------- Redacted---------- Redacted---------- Redacted------- Redacted---------- Redacted---------- Redacted------- Redacted---------- Redacted---------- Redacted------- Redacted---------- Redacted---------- Redacted------- Redacted---------- Redacted---------- Redacted------- Redacted----------UST00496472 (emphasis added).
Page 42(92.) probably proof of a meeting quote or fraise that “Suddenly” the BOD agreed to the terms while all the other documents prove there is still uncertainty to approve
93. At these September 5, 2008 meetings, Director Lockhart and Secretary Paulson told
Fannie Mae’s and Freddie Mac’s executives and directors, in no uncertain terms, that the
Companies would be placed in conservatorship, whether or not they consented. Secretary Paulson
and Director Lockhart emphasized that the Companies had no other option, and that they expected
the Companies’ boards of directors to comply. Paulson falsely told them: “We have the grounds
to do this on an involuntary basis, and we will go that course if needed.” Likewise, Redacted------- Redacted---------- Redacted---------- Redacted------- Redacted---------- Redacted---------- Redacted------- Redacted---------- Redacted---------- Redacted------- Redacted---------- Redacted---------- Redacted------- Redacted---------- Redacted---------- Redacted------- Redacted---------- Redacted----------
Page 43(93.) probably this is about the same meeting as (92.) but goes on with more quotes from either Paulson or Lockhart stating unconstitutional things
100. Redacted---------- Redacted---------- Redacted------- Redacted---------- Redacted---------- Redacted------- Redacted---------- Redacted---------- Redacted------- Redacted---------- Redacted---------- Redacted-------8 lines
101. Redacted---------- Redacted---------- Redacted------- Redacted---------- Redacted---------- Redacted------- Redacted---------- Redacted---------- Redacted------- Redacted---------- Redacted---------- Redacted-------6 lines
Page 45(100. &101. ) have no context and are 100% Redacted
Neither Company incurred or was likely to incur losses that would
deplete all or substantially all of its capital
126. From December 31, 2007, to June 30, 2008, Fannie Mae’s total capital increased
from $48.7 billion to $55.6 billion, and its core capital increased from $45.4 billion to
$47.0 billion. Thus, Fannie Mae’s capital had not been depleted.
127. Likewise, Freddie Mac’s capital had not been depleted. From June 30, 2007, to
June 30, 2008, Freddie Mac’s core capital decreased only slightly from $37.9 billion to $37.1 billion. Further, the BlackRock Redacted---------- Redacted---------- Redacted------- Redacted---------- Redacted---------- Redacted------- Redacted---------- Redacted---------- Redacted------- Redacted---------- Redacted---------- Redacted------- Redacted---------- Redacted---------- Redacted------- Redacted---------- Redacted---------- Redacted-------
Page 51(127.) probably a document from BlackRock that confirms Freddie’s core capital only decreased from $37.9B to 37.1B and was not depleted and fannie core capital increased from $45.4B to $47.0B
135. On August 25, 2008, less than two weeks before Fannie Mae and Freddie Mac were
placed into conservatorship, independent investment firm BlackRock Redacted------- Redacted---------- Redacted------- Redacted---------- Redacted------- Redacted---------- Redacted------- Redacted---------- Redacted------- Redacted---------- Redacted------- Redacted---------- Redacted------- Redacted---------- Redacted------- Redacted---------- Redacted------- Redacted----------
Page 54(135.) probably a document from BlackRock that proof solvency two weeks before conservatorship
146. In order to support the false narrative put forth by the Government that the
conservatorships were necessary to “rescue” Fannie Mae and Freddie Mac from financial distress, Redacted------- Redacted---------- Redacted------- Redacted------- Redacted---------- Redacted------- Redacted------- Redacted---------- Redacted------- Redacted------- Redacted---------- Redacted------- Redacted------- Redacted---------- Redacted------- Redacted------- Redacted---------- Redacted------- Redacted------- Redacted---------- Redacted------- This created the illusion that the Companies needed to accept a massive capital infusion from the Treasury, when in fact they never needed to do so. Simply put, it was all smoke and mirrors. Redacted------- Redacted------- Redacted---------- Redacted------- Redacted------- Redacted---------- Redacted------- Redacted------- Redacted---------- Redacted------- Redacted------- Redacted---------- Redacted------- Redacted------- Redacted---------- Redacted------- Redacted------- Redacted---------- Redacted------- Redacted------- Redacted---------- Redacted------- Redacted------- Redacted---------- Redacted---------- Redacted------- Redacted------- Redacted---------- Redacted------- Redacted-------
Page 56(146.) probably proof of the government mantra “we are rescuing FnF because they are insolvent” (while they were not) and proof of all the Smoke and mirrors they used to prove their point
Improper Write-Down of Deferred Tax Assets
156. Further, the contemporaneous analysis of Freddie Mac’s future financial condition
by BlackRock Redacted------- Redacted---------- Redacted------- Redacted------- Redacted---------- Redacted------- Redacted------- Redacted---------- Redacted------- Redacted------- Redacted---------- Redacted------- Redacted------- Redacted---------- Redacted---------- Redacted------- Redacted------- Redacted----------
Page 62(156.) probably a BlackRock document that proves Freddie’s future condition would be solvent
Post Conservatorship Events: The Government Strengthens Its Grip on the
Companies By Creating The Third Amendment to the PSPAs
166. Even saddled with the Government’s improper accounting manipulations and
extortionate interest charges relating to the forced borrowing of money they did not need, the
Companies came roaring back to profitability. By 2010, the FHFA observed that the Companies’
financial results were Redacted------- Redacted------- Redacted---------- Redacted------- Redacted------- Redacted---------- Redacted------- Redacted------- Redacted---------- Redacted---------- Redacted------- Redacted-------
Page 65(166.) probably documents that show FnF could pay the non-market conform 10% interest rate and simultaneously pay down the liquidation preference and be profitable in the foreseeable future
167. By late 2011, both Treasury and the FHFA Redacted---------- Redacted------- Redacted------- Redacted---------- Redacted------- Redacted------- Redacted---------- Redacted------- Redacted------- Redacted---------- Redacted------- Redacted------- Redacted---------- Redacted------- Redacted------- Redacted---------- Redacted------- Redacted------- Redacted---------- Redacted------- Redacted------- Redacted---------- Redacted------- Redacted-------
Page 65(167.) probably document(s) from discovery or document numbers that show treasury and FHFA know they would be profitable in the foreseeable future
169. Redacted---------- Redacted------- Redacted------- Redacted---------- Redacted------- Redacted------- Redacted--- Redacted------- Redacted------- Redacted---------- Redacted------- Redacted------- 5 lines
170. Treasury officials Redacted---------- Redacted------- Redacted------- Redacted---------- Redacted------- Redacted------- Redacted------- Redacted------- Redacted---------- Redacted------- 2 lines
Page 66(169 &170.) have no context
174. ---------- Redacted------- Redacted------- Redacted---------- Redacted------- Redacted------- Redacted------- Redacted------- Redacted---------- Redacted-------3 lines
Page 67(174.) has no context
So What does Washington Federal want ? (13-385)
WASHINGTON FEDERAL v. United States……………… Common & Preferred
United States Court of Federal Claims
https://www.courtlistener.com/docket/4198605/washington-federal-v-united-states/
This case started on June 10, 2013 and was Assigned To: Margaret M. Sweeney
In their initial prayer for relief they demand:
https://www.courtlistener.com/recap/gov.uscourts.cofc.28070.1.0.pdf
PRAYER FOR RELIEF
WHEREFORE Plaintiffs Washington Federal, Michael McCredy Baker, and City of Austin Police Retirement System demand judgment in their favor and in favor of the Classes against Defendant, the United States of America, as follows:
A. Determining that this action may be maintained as a class action;
B. Certifying Classes of, (A) for Fannie Mae (1) all persons or entities who held
shares of Fannie Mae common stock on or before September 5, 2008, and (2) all persons or
entities who held shares of Fannie Mae preferred stock on or before September 5, 2008; and, (B)
for Freddie Mac (1) all persons or entities who held shares of Freddie Mac common stock on or
before September 5, 2008, and (2) all persons or entities who held shares of Freddie Mac
preferred stock on or before September 5, 2008.
C, Finding that Plaintiffs have met the requirements of a class representative and
may maintain this action as representatives of the Classes;
D. Finding that the Defendant has taken and/or illegally exacted Plaintiffs’ and the
Classes private property in violation of the Due Process and Takings Clauses of the Constitution;
E, Determining and awarding Plaintiffs and the Classes damages suffered by them
by virtue of the Defendant’s taking and/or illegal exaction in the amount of $41 billion, or some
other amount to be determined at trial;
F, Prejudgment and post-judgment interest, together with any and all further costs,
disbursements and reasonable attorneys’ and experts’ fees;
G. Granting all other relief as this Court may deem just and appropriate.
Then on Apr 4, 2014 it was ORDERED in document 44: “As alluded to in the court's February 7, 2014 order, briefing regarding the motion to dismiss is stayed pending the conclusion of jurisdictional discovery in Fairholme. Once the parties in Fairholme file a postdiscovery joint status report, the court will issue an order in this case regarding further proceedings. Signed by Judge Margaret M. Sweeney.”
Then on Jan-12-2018 following was filed in the Fairholme case 13-465C document 396
http://www.glenbradford.com/wp-content/uploads/2018/01/13-465-0396.pdf
On January 11, 2018, the parties in the above-captioned case filed a joint status report (1) indicating that they had completed the quick peek discovery procedure
Not sure if the above 2 was an indication that Washington Federal could proceed or if plaintiffs are waiting on final discovery to get started again, Sweeney said “the conclusion of jurisdictional discovery” which is not “completed the quick peek discovery” but anyway
On Nov 14, 2018 the First Amended REDACTED Complaint was filed
https://www.courtlistener.com/recap/gov.uscourts.uscfc.28070/gov.uscourts.uscfc.28070.70.0_1.pdf
this document states the same prayer for relief as the initial prayer for relief, so let Sum-up the REDACTION is Washington Federal’s (13-385) FIRST AMENDED COMPLAINT and look for clues in the redactions to understand the scope:
Page 7(4.) probably a report from MS that concludes 'Forgery And Fraud'
Page 8(6.) probably FHFA’s August 22, 2008 letters, that state FnF soundness
Page 11(11.) probably proofs FnF were solvent and because of false narrative of their financial distress the DTA needed reduced
Page 23(46.) probably a statement of Secretary Geithner approving or applauding an increase of their retained portfolio
Page 23(47.) probably a journal or financial result that shows OFHEO is flip flopping capital restraints
Page 26(54.) F) probably about a statement former speechwriter for President George W. Bush, made about What to Do about Them http://people.stern.nyu.edu/svnieuwe/econvoice_ARVNW.pdf
g) & h) unknown context but probably about the flip flopping of capitalization standard, that a week later FnF miraculously became under-capitalized
Page 28(57.) probably news coverage that the governments opinion is now indeed undercapitalized
Page 28(58) probably about https://fcic-static.law.stanford.edu/cdn_media/fcic-docs/2008-09-04%20FHFA%20Dickerson%20ltr%20to%20Fannie%20Mae%20Mudd%20-%20Mid-year%20letter.pdf
That proofs here is some serious flip flopping going on, “and we even put a confidential stamp on it” LOL
Page 29(59.) probably proof about (58.) that they openly stated the undercapitalization
Page 29(60.) probably a secondary proof of (58)
Page 29(61.) probably statement or report from MS that says FnF are undercapitalized while two other letters (to Mudd & Syron) proof the opposite just 13 days earlier
Page 30(62.) probably a statement from FHFA’s DeLeo that says FHFA concluded FnF are undercapitalized
Page 30(63.) probably the same statement as (62.) but a different part of it with her proving MS also confirmed her undercapitalization fabrication
Page 32(70.) probably excerpt of document or email from GT, that says the PSPA has nothing to do with the financial solvency, or is asking reasons as to why they think the PSPA has any meaning in financial solvency
Page 33(71.) probably a statement in a document after conservatorship that proves the old BOD thought the terms of the PSPA were too harch
Page 33(73.) probably several quotes from officials who at the time said FnF in the future will no longer exist in prior form and a wind down scenario is in place
Page 36(79.) probably something from treasury and FDIC admitting the decrease in value of the preferred and common stock value
Page 40(88.) the most important one. probably a script from a meeting between the BOD and FHFA/Treasury that proves they entered with Coercion/Duress into the conservatorship (UST00530714.) (later Judge Sweeney quotes this section as death grip)
Page 40(89.) probably breathtaking Script that proves ”the highly unusual provision in HERA, that immunized the Companies’ directors against liability for consenting to the appointment of the FHFA as conservator. See 12 U.S.C. § 4617(a)(6).”
Page 41(90.) probably an agency who has criticism on FnF management and board of directors, it later goes on with the (89.) script and ex Freddie CEO Syron “that the letter was there as a mechanism to bring about a result”. (later Judge Sweeney quotes this as either agree or you’re out”)
Page 42(92.) probably proof of a meeting quote or fraise that “Suddenly” the BOD agreed to the terms while all the other documents prove there is still uncertainty to approve
Page 43(93.) probably this is about the same meeting as (92.) but goes on with more quotes from either Paulson or Lockhart stating unconstitutional things
Page 45(100. &101. ) have no context and are 100% Redacted
Page 51(127.) probably a document from BlackRock that confirms Freddie’s core capital only decreased from $37.9B to 37.1B and was not depleted and fannie core capital increased from $45.4B to $47.0B
Page 54(135.) probably a document from BlackRock that proof solvency two weeks before conservatorship
Page 56(146.) probably proof of the government mantra “we are rescuing FnF because they are insolvent” (while they were not) and proof of all the Smoke and mirrors they used to prove their point
Page 62(156.) probably a BlackRock document that proves Freddie’s future condition would be solvent
Page 65(166.) probably documents that show FnF could pay the non-market conform 10% interest rate and simultaneously pay down the liquidation preference and be profitable in the foreseeable future
Page 65(167.) probably document(s) from discovery or document numbers that show treasury and FHFA knew they would be profitable in the foreseeable future
Page 66(169 &170.) have no context
Page 67(174.) has no context
I will post the complete REDACTIONS ONLY file later as reply to this post, otherwise it will make this post unreadable
Then we look at the claims for relief that states following :
VIII. CLAIMS FOR RELIEF
COUNT ONE
(ILLEGAL TAKING AND/OR EXACTION IN VIOLATION OF THE UNITED STATES CONSTITUTION)
https://www.courtlistener.com/recap/gov.uscourts.uscfc.28070/gov.uscourts.uscfc.28070.70.0_1.pdf
217. Plaintiffs incorporate by reference and reallege each and every allegation of the
preceding paragraphs, as though fully set forth herein.
218. In imposing the unprecedented conservatorships over the Companies and in taking
and/or illegally exacting more than 1 billion shares of the common stock and approximately 597
million shares of the preferred stock of Fannie Mae (with a redemption value of approximately
$21 billion) and approximately 650 million shares of the common stock and approximately 464.1
million shares of the preferred stock of Freddie Mac (with a redemption value of approximately
$14 billion) without just compensation, the Government destroyed the rights and value of the
property interests tied to the common and preferred stock of the Companies held by Plaintiffs and
the Classes, nullified their reasonable, investment-backed expectations, and violated the
fundamental principles of the Due Process and Takings Clauses of the United States Constitution.
219. In taking private property, the Government is required to adhere to due process of
law and to respect the legal rights of affected parties.
220. The Government violated the statutory, contractual, and Constitutional rights of
Plaintiffs and the Classes in taking and/or illegally exacting virtually all the value of the above
referenced common and preferred shares of both Fannie Mae and Freddie Mac that they owned,
without providing just compensation.
221. HERA did not authorize the Government to assert a conservatorship over either
Fannie Mae or Freddie Mac at the time the conservatorships were imposed over them.
222. As described herein, as a result of the Government’s legally unsubstantiated
imposition of the conservatorships, the Government destroyed the value of the stock held by
Plaintiffs and members of the Classes, nullified their reasonable, investment-backed expectations,
and violated the fundamental principles of the Due Process and Takings Clauses of the United
States Constitution. The Government took and/or exacted the property and property rights of the
Companies’ shareholders to improperly and impermissibly benefit private parties and public
interests in at least the following manners:
a. By causing the Companies to assume a significantly increased level of risky
mortgages and mortgage-related assets prior to the conservatorships, thus leading to greatly
diminished net worth and capital of the Companies;
b. By improperly imposing the PSPAs and conservatorships over the Companies
under false pretenses with no valid statutory basis;
c. By forcing the Companies to assume the toxic assets of other financial institutions
following the conservatorships, thus engaging in a “backdoor” bailout of those other financial
institutions and lowering the equity value of the Companies; and
d. By improperly taking all of the net worth of the Companies.
223. Even when the Government takes or illegally exacts private property to serve public
purposes, the United States Constitution requires the payment of “just compensation.”
224. The Government did not pay just compensation to Fannie Mae common and
preferred stock shareholders or Freddie Mac common and preferred stock shareholders for the
taking and/or illegal exaction of the value of their private property, equity interests in the
Companies. The Government’s actions required it to pay just compensation to the Plaintiffs and
members of the Classes under the Takings Clause of the United States Constitution.
225. The Due Process and Takings Clauses of the United States Constitution protect
shareholders from having their property and property rights taken and/or illegally exacted without
just compensation. As a direct result of the Government’s violations of the United States
Constitution, Plaintiffs and the Classes were injured, including monetary damage, as a direct and
proximate cause of the Government’s taking and/or illegal exaction of billions of dollars of
property interests associated with their holdings of Fannie Mae common and preferred stock and
Freddie Mac common and preferred stock. The Government is liable to Plaintiffs and the Classes
for the injury it caused.
So now from the list above we can conclude:
1) violated Due Process
2) no due process
3) violated the statutory, contractual, and Constitutional rights
4) HERA did not authorize the conservatorship
5) conservatorships destroyed the value of the stock & its expectations
6) prior to the conservatorships they demanded an increase in risky loan witch diminished the net worth
7) improperly imposing the PSPAs with no valid statutory basis
8) forcing toxic assets from others into the company was a “backdoor” bailout for others
9) improperly taking all of the net worth of the Companies
10) no just compensation illegally exacts private property
11) just compensation is needed under the Takings Clause of the United States Constitution
12) the Government’s violated the Constitution and is liable, as Plaintiffs were injured
Then in the end I’m concluding this Washington Federal case is a total-loss for the government, this is not something that can be repaired either way, if plaintiff loses in this case all the above accusations need to be proven wrong, and that is something they cannot do as the proof contradicting the governments right is already presented(although Sealed) in this case, you will need a deep pockets to settle this case
In ending we can conclude we are waiting on final discovery in fairholme 13-465C, and the schedule in fairholme (due Jan-10-2020) that includes the discovery end date, which will release this case as Once the parties in Fairholme file a postdiscovery joint status report, the court will issue an order in this case regarding further proceedings.
Your welcome Lotto65
I emphasize that after Jan-10 we have more news
Thanks brooge, I Appreciate the continued support